Euro zone finance ministers approve Cyprus rescue plan

Euro zone finance ministers gave their approval to an EU-IMF plan for restructuring Cyprus's banking sector on Monday, putting their stamp on a proposal that will fundamentally overhaul the country's two largest banks.

One official involved in the Eurogroup discussions confirmed that the 17 euro zone ministers had given their backing to the plan, which was negotiated earlier on Sunday between Cyprus's president and EU and IMF leaders, was workable.

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"It's approved," the official said by text message.

The proposal will see the creation of a "good bank" and a "bad bank", with deposits below 100,000 euros in Popular Bank of Cyprus transferred to the Bank of Cyprus, the country's largest lender.